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How Apple Marched to an All-Time High Last Week

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Oct. 14 2019, Updated 12:39 p.m. ET

Apple (AAPL) had a momentous week last week, reaching an all-time high of $223.81 on October 11. The stock reflected the optimism of the broader markets as fingers remained crossed for a US-China trade deal. With a valuation of $1.07 trillion, Apple has now surpassed Microsoft (MSFT). Apple stock climbed 4% from its previous week’s closing and settled at $236.21 on October 11.

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Apple stays put on Nomura’s price upgrade and trade deal optimism

The disappointment from the previous week’s manufacturing and services data has given way to speculation about another interest rate cut. Craig Johnson, the chief market technician at Piper Jaffray, said, “The silver lining to last week’s disappointing economic data appeared to be twofold.” He added, “It materially increased the probabilities for further FOMC interest rate cuts and…also increased the pressure on the U.S. and China to work toward a timely trade resolution.”

During the first three days of last week, the stock showed minimal movement but remained in positive territory. It was still basking in the glory of its highest gain in 2019, which it posted in the previous week. On October 11, the stock jumped 2.7% and touched its peak, reinstating its position as the most valued stock in the US markets.

Let’s do a quick recap of all the developments that happened for Apple last week.

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October 7 started with a bang for Apple as Nomura Instinet raised its price target for the stock from $185 to $205 amid robust demand for the iPhone 11. Analyst Jeffrey Kvaal reiterated a “neutral” rating on the stock. Analysts can’t emphasize enough on how crucial the iPhone 11 is for Apple’s numbers. In the previous week, Apple saw an upgrade by JPMorgan Chase. The brokerage also raised its price target to $265 from $243. Despite Nomura’s upgrade, though, the price target indicates a 13% downside for Apple stock.

Stock stumbled midweek amid trade blacklisting concerns

On October 8, the broader markets were under pressure amid trade blacklisting woes. The US announced that it would trade blacklist 28 Chinese AI companies amid concerns over human rights violations. Allegedly, these organizations supported China in its abuse toward Muslim minorities in the Xinjiang region. Adding to the negativity was a report from the South China Morning Post indicating that China had “toned-down” trade talk expectations. Apple stock dropped 1.2% on October 8 amid heightening uncertainty.

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As the US and China head for a preliminary agreement, Apple ends in the green

Noted Apple analyst Ming-Chi Kuo boosted positivity around the stock as he updated the launch dates for the Apple iPhone SE2 and the Apple AR glasses. He expects the AR glasses to make their debut in early 2020. Some other possible 2020 launches include the iPad Pro, another version of the MacBook, and 5G iPhones. These estimates have triggered widespread anticipation now that an October event is in the cards for Apple.

As the week neared its end, the broader markets traded higher on optimism related to an imminent trade deal. President Trump’s tweet about his plans to meet the Chinese vice premier sent the markets higher. Besides promising signs of trade negotiations between the US and China, Apple again saw analysts turning bullish on the stock.

On Friday, Wedbush analyst Daniel Ives boosted his price target on Apple stock to $265 from $245. Ives stated that the Chinese markets were becoming increasingly crucial for Apple. Markets such as China and India have been instrumental in driving sales of the affordable iPhone 11. The change in Tim Cook’s pricing strategy for iPhones has worked its magic. Cheaper iPhones are immensely appealing to budget-conscious buyers in a weak economy. Ives is also bullish on the prospects of Apple TV+.

The week closed on a positive note for Apple. Fast Company cited an unnamed source indicating that Apple has been pushing the timeline aggressively to equip its iPhones with in-house 5G modems in 2022.

We’re interested to see whether Apple stock keeps up the momentum this week. As the company’s fourth-quarter results and the launch date for Apple TV+ draw nearer, it’s keeping investors in suspense. The stock’s response to further developments in US-China trade relations will also be crucial.

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